George Soros Fund Management’s publicly disclosed holdings dropped by 37% to 3.5 billion, as of the end of the first quarter of 2016. Soros reduced the funds stake in some of the world’s biggest technology stocks. The prices of these stocks are tied to the broader economic cycle.
Soros had pointed out that the immense credit in the economy seems to be a situation that may resemble the 2008 scenario. The Chinese market turbulence may likely have a long-lasting effect on the other economies of the world and may worsen the deflationary environment. The demand for gold and other precious metals is closely tied to the health of the Chinese and other Asian economies which are big markets for gold. As a result, Soros’s increase exposure to gold in the first quarter may come as a surprise.
Gold which is famously known for its safe-haven appeal is bound to rise in such global turmoil. Soros acquired 1.7% of Barrick Gold (ABX) which is Barrick’s biggest US-listed holding. Soros also disclosed owning call options of 1.1 million shares in the SPDR Gold Trust. (GLD) GLD is an ETF that closely tracks gold prices.
The Soros fund which is currently structured as a privately owned family office, bought 19,4 million shares in Barrick Gold having previously disclosed its stake in the world’s top gold mining company by production. In the third quarter of the year, 2015 Barrick is up 39% since March 31. The Soros fund may have its eye on heaven bids not only in precious metals but also in mining companies.